The number of residential building approvals fell by 6.9% during June. The figures from the Australian Bureau of Statistics show particular weakness in the multi unit segment of the market, with approvals declining by 15.2% to a level that is 36.1% lower than 12 months earlier.
Approvals for detached houses also dropped slightly during June but have risen by 10% compared with a year ago.
Total seasonally adjusted building approvals increased in Tasmania by 7.2%, by 7% in Queensland, by 6.7% in New South Wales and by 2.7% in the Australian Capital Territory.
Building approvals fell by 24.3% in Victoria, by 11.1% in the Northern Territory, by 9.6% in South Australia and by 0.4% in Western Australia.
‘We had hoped that the fall in residential building approvals during May was a blip but today’s figures now show two consecutive quarters of decline. This means that the number of approvals is 13% lower than a year ago,’ said Shane Garrett, HIA senior economist.
‘There had been some signs in earlier months that a housing recovery was underway but today’s figures put a large question mark over that,’ he warned.
‘We continue to see weakness in segments of the market like multi units as well as in regions like Victoria and Tasmania. As long as this weakness persists, there is no prospect of a broad based recovery occurring,’ Garrett explained.
‘While there is no single solution to the housing industry’s difficulties, today’s figures surely make it imperative for the Royal Bank of Australia to cut rates. For some time, we have been calling for structural impediments on housing activity to be reduced, including the taxation burden, excessive planning barriers and regulatory costs. The forthcoming election provides a real opportunity for solutions to these issues to be advanced,’ he added.
